Insights into social procurement: from policy to practice

Social issues Australia Western Australia South Australia Victoria
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This document provides insights into current social procurement policy and practice within the public sector in Australia. It incorporates input drawn from interviews with representatives of three State Government departments, and also from resource materials previously produced by a range of interested parties.

What is social procurement?

Social procurement is the intentional generation of social value through procurement and commissioning processes. It occurs when organisations buying a good or service or delivering works choose to purchase a social outcome - over and above the products or services required.

For governments, social procurement is a powerful tool that improves value for money outcomes by aligning multiple, and often complex, strategic objectives. Through linking and integrating social and economic policy objectives, social procurement strategies demonstrate how improving ‘quality of life’ outcomes can be embedded in the business of all public sector entities (and of course, beyond) – rather than being seen as the sole domain of social policy-focused agencies. Specifically, social procurement strategies assist the public sector to:

  • Build and sustain stronger communities, promoting social inclusion and breaking cycles of disadvantage
  • Open new opportunities for strengthening local and state skill bases
  • Strengthen local economic development
  • Grow and strengthen innovative partnerships across all sectors
  • Demonstrate leadership
  • Achieve greater value for money whilst embedding triple-bottom line principles

Social procurement can take many forms, which can be loosely grouped into direct and indirect approaches. Direct approaches involve purchasing from for-social-benefit entities, such as: not-for-profits, social enterprises, Australian disability enterprises, Aboriginal-owned businesses, social businesses, worker or community owned cooperatives and others. indirect approaches involve including social clauses (e.g. employment targets for long-term unemployed) in ‘regular’ contracts with private sector providers, screening supply chains for ethical considerations, and the like.

Interest in social procurement is growing as elected officials, senior government officers, commissioners and procurement staff increasingly recognise the economic efficiency of using a single pool of money to achieve multiple organisational objectives.

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